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Calif. lawmaker cleared by ethics panel over tax credit for Maryland home

The House ethics committee has cleared Rep. Pete Stark (D-Calif.) of any wrongdoing in claiming his Maryland home as his principal residence to qualify for a $3,770 tax break.

Stark, the second most senior member of the House Ways and Means Committee, faced scrutiny last year for claiming Maryland’s homestead tax credit because he was registered to vote in Fremont, Calif., and rented a house there.

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The committee on Thursday announced it had unanimously voted to release its public report exonerating Stark.

“Stark did not violate any provision of the Code of Official Conduct or any law, rule, regulation, or other standard of conduct applicable to his conduct in the performance of his duties or discharge of his responsibilities relating to a state law requirement that all Maryland homeowners submit a one-time application to verify eligibility for a property tax credit called the Homestead tax credit,” the ethics committee said in a release.

The investigation was prompted by a referral from the Office of Congressional Ethics (OCE), an independent entity the House created in 2008 to help police members’ activity. The ethics committee included a report that addresses the findings and conclusions of the OCE’s review.

Stark’s spokesman said the office was “letting the report speak for itself.”

The OCE’s report recommended the ethics committee further examine Stark’s activities because there was “substantial reason to believe” that he may have violated rules by “misrepresenting information” on Maryland’s application for the homestead tax.

The OCE further pointed out that Stark changed his answer to one of the questions on the application two days after the first press report appeared about a member of Congress improperly receiving the homestead tax credit.

In its report, the OCE included a screen shot of Stark’s online application. The application includes a typed notation documenting Stark’s March 16 call the Maryland Department of Assessments and Taxation to change his answer about whether he is registered to vote in Maryland from yes to no.

“Mr. Stark called to change answer to question #4 from yes to no. 3/16/09,” the note said. “If anyone has questions about this file, you should contact Robert Young in administration. Do not answer questions about this file.”

Robert Young is the associate director of the state’s Department of Assessments and Taxation.

A report about whether Rep. Eliot Engel (D-N.Y.) improperly received the Maryland homestead tax credit appeared in The New York Times March 14. Maryland revoked Engel’s eligibility and in the article a state official said her office is reviewing the eligibility of other members of Congress who own property in Montgomery County and claim the credit.

At the time, Engel said he wasn’t aware that he was receiving it and it should be revoked if he is ineligible. Later, an accidentally leaked internal ethics committee document revealed that Engel, as well as Reps. Doris Matsui (D-Calif.), Edolphus Towns (D-N.Y.) and Stark, were under OCE review for receiving the tax credit. Matsui repaid $2,800 in back taxes. The OCE eventually ended its review on Engel, Matsui and Towns without recommending further investigation by the ethics committee.

In its report clearing Stark, the ethics committee said whether Stark later called the Maryland Department of Assessments and Taxation regarding his response to the question is “unclear” but “immaterial” because the state of Maryland did not rely solely on a person’s response to a voter registration question in determining eligibility for the tax credit. Further, after conducting the review, the state’s tax department determined that Stark was ineligible for the tax credit so he never received it for the year in question.

“However, it is unnecessary for the Standards Committee to untangle these issues because whether Representative Stark did indeed make such a phone call or not is immaterial in light of the totality of factual findings and conclusions reached by the Committee in this matter,” the ethics panel wrote.

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The OCE defended its review in a statement, highlighting the fact that it could not have known that Stark did not receive the tax credit that year because the finance office for the Anne Arundel County, where Stark lives, does not mail such information to homeowners until November 2009, three months after the OCE review concluded.

"The OCE conducted a thorough and professional review and accurately reported the facts gathered in the course of its review,” OCE spokesman Jon Steinman said in a statement. “The document the [ethics committee] is citing, in order to claim that the OCE‘s review was inadequate, was never provided to the OCE by Representative Stark. In fact, according to the Anne Arundel County Finance Office, such documents are not even mailed to homeowners until the end of November 2009 -- almost three months after the OCE review concluded.”

Steinman also aid the OCE focused on whether Stark’s call to the Maryland Department of Assessment and Taxation to change his answer to a question on the application violated Maryland law and the Code of Ethics for Government Service.

“Thus, the OCE review focused on what steps Representative Stark took or did not take to secure the credit not whether he was successful in securing the credit,” Steinman added. "At no time did the OCE subject Representative Stark to unfounded criminal allegations."